Mid-Day Oil Summary: Crude Eases Back

Crude markets are edging lower in a choppy session as increasing threats from Houthi’s on global shipping are weighed against record US oil output with the latest EIA data.

• Brent FEB 24 down -0.5% at 79.3$/bbl
• WTI FEB 24 down -0.5% at 73.83$/bbl
• OIL OPTIONS - ICE Brent Feb24 Option Expiry – Thursday 21 December 2023 at 19:30BST close. A total of 557mbbls of open Feb24 Brent options positions are currently due to expire on Thursday 21 December. Open interest is 354k for calls contracts and 204k for puts.
• Yemen’s Houthi rebels have vowed to continue targeting ships in the Red Sea despite the planned US-led naval task force to secure the area, according to Bloomberg. About 12% of world shipping traffic passes up the Red Sea and through the Suez Canal but the impact on oil supply has been limited so far.
• Chartering costs for Suezmax class vessels, the largest that can pass the Suez Canal, have jumped as more ships opt to sail around Africa.
• EIA data this week that showed an unexpected build in crude stocks while US crude output hit a new record high of 13.3 million bpd.
• The Canada Energy Regulator said it denied a variance request for the Trans Mountain Pipeline expansion project earlier this month because it did not adequately address concerns about pipeline integrity and environmental protection impacts.
• Russia’s Transneft may expand the oil loading capacity of Primorsk port in mid-2024 according to its CEO Nikolay Tokarev.
• China’s crude oil production was 17.20m mt in November, a rise of 2.5% on the year, according to OilChem citing NBS data.
• CDU capacity utilisation rates at Shandong’s independent refineries averaged 56.99% in the week to Dec. 21, according to OilChem.
• US gasoline and distillates both built as expected in the latest EIA report. Gasoline stocks rose with an increase in production and with another drop in implied demand to offset a drop in imports. Four-week distillates demand has fallen further below the previous five-year range, but gasoline demand has edged slightly higher above levels seen this time last year.
  • US gasoline crack down -0.8$/bbl at 17.48$/bbl
  • US ULSD crack down -0.1$/bbl at 38.36$/bbl